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USD/CHF – bearish correction losses 184 pips

FXstreet.com (London) - The USD/CHF has shed 184 pips in the European session in volatile times around shifts in global market sentiment.

The pair had climbed to record the highest prices since summer 2012 while Bernanke is speaking on ‘The Economic Outlook’ yesterday. Close attention was being paid to his testimony to the Joint Economic Committee of Congress while he was answering questions which have certainly given the market some clarity on the QE programme. QE is likely to remain for some time yet, with a very poor US labour market. The pair breached key resistance at 0.9775 and spiked through to 0.9817 for yesterday’s highs.

Today marks a clearer tone around global markets, and see’s risk aversion come back into play, with the Swiss frank benefitting from the unwinding of positions in the Yen for example. Increasing volatility in the JPY may see investors switch funding currencies once again, with the CHF an appropriate option given it’s attractive depreciation of late. Stops on the way down have exuberated the correction in the pair to 0.9670 with support at 0.9650. A move back to 0.9810 region would reduce this downside pressure, to allow for the bull run to resume.

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